For Friday, we are talking with Rod Rothwell, a long-term resident of Korea about the plight of young people today in Seoul. Then we talk with Simon Walsh a New Zealand wine entrepreneur. Simon and Alex discuss the changing wine market and the future trends.
Today’s episode is brought to you by the Four Seasons Hotel Seoul, Stylish elegance in the very heart of Seoul.
Alex discusses the plight of younger people in Korea with Rod Rothwell and then talks wine, and the wine industry with Simon Walsh.
Alex Jensen: It’s Friday, September 17. I’m Alex Jensen. And you’re listening to Koreabizcast with the KBLA. The great Dostoyevsky famously stated to ‘live without hope is to cease to live’. But then that should set off alarm bells for Korea younger generations, who were already complaining of a bleak future before the pandemic struck. And now in too many cases are left grasping for hope, in the shadows of opportunity, today will look much closer at their plight and the change that may lie ahead. But it’s also Friday, and so will lighten the mood with a chat about wine in part two, and the journey of a businessman who learned lessons as a young entrepreneur the hard way, and kept on going. Today’s program is brought to you by the ‘Four Seasons’, stylish elegance in the very heart of Seoul, and which has a third night free till October 31st. Before those interviews, your headline stories.
Alex Jensen: JEJU islands braced for the worst of Typhoon CHANTHU this morning, with heavy rain and wind already causing damage across the island and causing some flights and ferry operations to be canceled. The storms are set to pour a total of 1,000 millimeters of rain and blow winds of up to 40 meters per second. By this afternoon. It’s expected to pass southwest of Busan and get faster as it moves between South Korea and Japan. President Moon Jae-in flying to New York this weekend. before delivering a speech at the 76th UN General Assembly on Tuesday. North Korean ambassador to the UN Kim Sung is also expected to attend, with tensions rising between the Korea over recent missile launches and renewed insults hurled at Moon by Kim Yo-jong, the sister of North Korean leader Kim Jong-un, and the ratio of high-level female public officials in this country has climbed to close to 10% this year, a record high based on a new government report. The proportions have risen to 9.3% up from 8.5% last year. As of Wednesday, this week, the Ministry of SMEs and startups was among three government bodies that don’t employ any women in high level positions. Getting a number round up for you we’re set to go into the Chuseok holiday weekend with an uptick in daily COVID-19 cases, which are set to remain around the 2,000 marks after the count was 43 higher yesterday evening than the previous day. While we await the official figure later this morning. We can also say over 68% of the country’s population have had won vaccine, closing in on this week’s goal of 70%. And with more than 41% now fully vaccinated, health officials urging us to stay home over to Chuseok and avoid gatherings instead of traveling to visit relatives. Though millions of people are expected to do exactly that in accordance with the custom. And the KOSPI’s four day winning streaks over after tech losses caused the local benchmark stock index to drop point seven 4% to 3,130.09 points. Also, at the close of play yesterday, the local currency was down 1.31 against the US dollar to finish up at 1,171.81.
Alex Jensen: The government here recently announced details of dozens of youth policy measures South Korea’s younger people who were already referring to hell-Joseon before COVID-19 are facing mounting difficulties. KBLA Co-Chairman Rod Rothwell has vast experience working with young adults in this country. And so I wanted to draw on that to help better understand the situation. And why it really affects all of us. Rod, good to have you on Koreabizcast.
Rod Rothwell: Thank you very much, Alex, wonderful to be here.
Alex Jensen: Just remind us of your experience first that I just referred to with younger people, young adults really, because they are the group coming into the workforce. They are the ones facing an environment that is increasingly tough when it comes to getting a quality job as we’ll see in a moment. But first, your background.
Rod Rothwell: Right, Alex. Thank you. Um, so I came to Korea 25 years ago. And since then, I’ve been juggling two career paths working in corporations, but at least 12 of those years have been as a teacher in the universities. And the other way that I’ve been helping people is in coaching startups. And I’ve been doing that quite consistently now for about 10 years. So, I feel quite called qualified to kind of be a voice to relate to you what I’m hearing from them about the difficulties that they’re facing.
Alex Jensen: Saw research out from the Korea Economic Research Institute earlier this month based on a survey of the nation’s top 500 companies by revenue. And I’m just interested to see how this relates to that experience he just mentioned because it showed only 32.2% of 121 that responded, actually have plans to hire new employees in the latter half of the year. That means nearly seven out of 10 have no hiring plans for the rest of 2021. That is worrying. Do you think that really hits younger people hardest?
Rod Rothwell: Yeah, I really do. You mentioned in the intro talking about hell-Joseon. And that neologism has kind of morphed into the idea of Sampo, you know, giving up on three, three things giving up on relationships, marriage, and children, just somehow survive in this really tough environment. And, sadly, I’m hearing young people say, instead of Sampo, it’s actually Npo. And what they’re saying is we have to give up everything, we have to give up, social life, dreams of homeownership, all of that just because of this increasingly competitive and maybe one thing we can talk about in a second, differentiated life between those the haves and the have nots. So right now, they’re not in a good place. They’ve just been through 18 months of real difficulties. Definitely we know that young people’s unemployment rates and education has been what suffered the most during the pandemic. And right now, yeah, they’re in a pretty tough place.
Alex Jensen: Interestingly, if you look at overall data from Statistics Korea, though, the unemployment rate among younger people has actually fallen to 9% from 9.8% over the past 4 years, but it doesn’t tell the whole story. There are increasingly younger people getting part-time jobs or less serious jobs in their mind in terms of their bigger career plans, while waiting for that dream job to come along. And a criticism of the Moon Jae-in administration is that they have not been able to create decent full-time jobs. Is that something that you’ve seen reflected?
Rod Rothwell: Yeah, it is. I think that, you know, in April this year, apparently 200,000 young Koreans took the civil servant exam, and only 5,000 of them actually got positions. So yeah, the government can say they’re spending money. But are they? Is this spending money actually coming out in investment and creating opportunities? centrally Tough, Alex, that figure of 9%. You know, I do look at it really suspiciously. I think that we’ve got a lot of people giving up on even looking forward. I think we have a lot of people who are, like you said, really underemployed. So that 9% trigger, although it’s not a bad headline figure for a youth unemployment, globally. I don’t think it’s a very firm number.
Alex Jensen: The other thing is that when you look at the raw numbers, the number of unemployed people with a college or graduate degree in this country stood it. This was at the end of June 485,000 and I don’t want to compare apples and oranges. But that’s a significantly higher number, even then, say overall COVID-19 infections and in this country, that means if we’re worried about a pandemic, which we should be, we should also perhaps be sparing a significant thought for this vast number of people who’ve gone through a significantly grueling education process acquired a degree and not been able to get a job.
Rod Rothwell: Yeah, I completely agree. And going back to the numbers that you quoted, at the beginning of the interview, that if 70% of firms are not even considering putting on people at the moment, then like you said, these young people who have gone through 4 semesters now of online learning, still paying full University fees, without any university experience, basically now have this piece of paper and they’re going well, what is it? Alex, I’d like to ask you the question. You know, you come from UK, and the UK has a really exceptional vocational education system. Australia does as well. What do you think about that? Do you think that’s where we should be focusing ideas?
Alex Jensen: You know, I was struck by the example of a friend of a friend is always a friend of a friend, isn’t it? But a few years ago, when I was still living in the UK, he had been working with a law firm he’d been doing well as a solicitor, what seemed to be doing well from the outside and one day he was quitting to become a plumber and it seemed just so counterintuitive. But he ended up within a few years earning more money as a plumber than he had been as a solicitor. And enjoying it more. That was something he actually enjoyed doing personally getting his hands dirty and going around different places not being stuck in an office. Different people obviously have different vocations. That’s what we call them. So vocational training sounds like a very obvious thing to be good at and to focus on rather than having everybody rushing to do similar types of degrees and over educated country, on one level might be great, Koreans so good at education. But on the other hand, it’s a big red flag, isn’t it? that when you compare with the experiences that you and I have in the UK, in Australia, that there aren’t enough people who are willing to see beyond that and forget the pride forget what the neighbors are saying and try to work out what’s best for themselves or for their daughter or son, and basically try to set themselves up for realistic success for life. Because I still wonder whether we’re all just chasing rainbows here to a certain extent, especially in an environment where the country is seeing a chronically low birthrate and aging society, more digitalization than ever jobs that are going to be digitalized in the future, if they’re not already now, you know, these are all converging at the same time on the road.
Rod Rothwell: It really is, you know, and I just think that I’m right now on my screen, looking at these 87 Youth policies that are aimed at the youth. And it’s so stark, that there’s nothing about investing in jobs, that are going to be the growth jobs in career over the next 20 years. So, there’s nothing about encouraging people to become aged careers, there’s nothing to encourage people to become geriatric nurses. Which, if we do have a super aged society by 2015, that’s where we’re going to need people. We’re not going to need that many software engineers because we’re training AI is to make software engineers redundant. Where is the sense of perspective in these policies? That really helps us think about, okay, not job growth. But you know, career planning. What career planning does Korea have to do to go forward?
Alex Jensen: We talked about the presidential election already this week on this platform, and it’s clear to see why younger people are going to be very interesting to watch which way they go, which candidates they’re most influenced by partly because of what we’ve said already. Housing is another huge one. As part of the government plan. You mentioned before dozens of proposals put forward one of them is to make hundreds of thousands of youth housing units available. But it’s really a disaster. Frankly, even for families like my own if you don’t have a massive chunk of money to buy a house or to enter an increasingly difficult john say system, you are left with very few options and I don’t think we can underestimate housing, can we? As a problem in this mix? If you can’t feel remotely secure, how are you ever going to contribute meaningfully in your job and in society.
Rod Rothwell: And especially in, you know, if we think about young people today are not going to have the other sources of security that previous generations have, they’re not they’re probably not going to have job security. They’re almost certainly not going to have relationship security. They’re not going to have financial security. So maybe the one thing they could I aim at, would be some kind of, you know, housing security. And if they could have that, then maybe other things wouldn’t matter so much, especially as more and more of them, the home will also be the office. So, they can’t really you know, they can’t live in what are they Goshitels anymore, they can’t live in those kinds of places. They need a place with two rooms, that one can double as a studio or a work from home place. Yeah, I think that the government policies, they shown intent, but this still really wrapped up in a 20th century model of traditional employment. And I think that’s what’s going to change what happens next year in the election. Now that we kind of know that one of them is going to be Lee Jae-myung and he is a UBI proponent, that for me is very interesting.
Alex Jensen: Universal basic income (UBI) is something that flies in the face of a lot of those goals that drive education further. So, it will require an open-minded populace to embrace that except it. Can you see Korea doing so?
Rod Rothwell: I don’t want to sound partisan, but at least with Lee Jae-myung, you have a candidate who’s opened up the discussion. So, if these conversations need one person to begin, maybe he could be the person to at least begin the conversation.
Alex Jensen: Well, if anyone’s not heard the interview, we did this week on the presidential election that is available, obviously via our website, isn’t it? kbla.net and KBLA if you weren’t aware, if you’re just tuning in at this particular moment and you flicked ahead, KBLA is very much the force behind Koreabizcast. So, we’re going to be really pleased to welcome you on a number of business trends in the coming weeks, I think we do need to revisit some of the issues surrounding elderly poverty and the aging society that we have, but I just like to finish with one bit of advice, perhaps for businesses, and business leaders who might be listening right now. Or next time a young person comes in applying for a job, or next time a young person complains about their lack of money. Do you think it’s very important that business owners or decision makers factor in everything we’ve said during this conversation and much more beyond?
Rod Rothwell: Yeah, I think it is time to actually, you know, admit a little bit of vulnerability on both sides of the fence that youngsters are saying, hey, look, you know, I’ve worked really hard to get here. But I need I do need. I am doing this for financial reasons and I think businesses need to also admit that, hey, look, we do value you as a person and we want you to stay long term. So our conversation that is a little bit more open and more honest than normal. Yeah.
Alex Jensen: Rod Rothwell, Co-Chairman KBLA, great to have you with us. I’ll be speaking to you very shortly anyway, and I look forward to next time on the podcast.
Rod Rothwell: Excellent. Thank you very much, Alex, really appreciated.
Alex Jensen: Now if you’re a fan of New Zealand wines, you’ll be very familiar with your Sauvignon Blanc and Pinot Noir you’ll be used to seeing place names like Marlborough and Hawke’s Bay printed proudly on labels. But if you’re in Korea, there’s another very important name to be aware of, our next guest, Simon Walsh has been in Korea well over a decade. And thank you very much for taking the time to join us.
Simon Walsh: Thank you for having me.
Alex Jensen: Your journey has been an interesting one. I read that you started out like many when you first come to Korea as an English teacher, but then moved into the wine and food business and you’ve had a restaurant to your name, you’ve become involved with another restaurant. Can you give us an idea of how that all looks to you from hindsight now that journey?
Simon Walsh: I came here an English teacher, and then I set up a trade company importing food and beverage products. I did that at a quite young age. I did that very fresh around 24 years of age. And in hindsight, I made a lot of mistakes. I lost a lot of money. And an older me wouldn’t have done it that way. But because I was young and ambitious and a little bit naive, I probably learned a lot more than if I’d done it later in life. So, in hindsight, I wouldn’t have done it that way. But I’m actually glad I did.
Alex Jensen: You were pretty insightful in seeing the rise of the wine market, though in in Korea, or it looks like that. looking backwards because since you’ve been involved wine has continued to grow in this market. According to global compass 2020 published by wine intelligence, South Korea is now the second most attractive wine market in the world after being at number 10 in the previous year. Is that believable to you? Or is that a kind of COVID-19 blip?
Simon Walsh: Well, I first started importing wine in 2009, which was after the big global crash pretty much so the wine market was in a bit of disarray when we first started and it has grown from strength to threads. I started my MOZZIE brand in 2015. And there was demand there so there’s already demand from the consumer around particularly in New Zealand and Sauvignon Blanc and from one particular region which Marlborough, which you mentioned, since COVID, there’s been a big demand particularly people drinking at home. As we’ve seen demand shift from traditional hotels and restaurants through the bottle stores which has been significant and the type of wine, they’re drinking has shifted from the cheaper 10,000 Won or lower bottle of wine up to the 25 plus bottle so that mid-range price on the wine, not ultra-premium, but a good bottle which is real New Zealand tends to fall on the market. So, it’s been quite good for us.
Alex Jensen: To look at the numbers in more detail 239 million US dollars’ worth of wines imported between January to November last year. This is according to career customer service data, the whole of 2019 it was at 204 million. So that’s an indication of what you’re saying people drinking more wine generally, if we break it up according to red and white, New Zealand figures in the white imports tally, and that’s Sauvignon Blanc in particular, isn’t it that’s where your business is mainly focused on understand
Simon Walsh: it because of the climates in New Zealand, we tend to have warm days and cool nights in the summer, we don’t produce a lot of heavier red, we breed tend to produce Pinot Noir, which is a lighter body red. And we’re very fast stepping Sauvignon Blanc, particularly the one from the Marlborough region. And that’s because of its acidity level, it’s very hard to match it, it’s very distinctive. And for the Korean palate, they really like it. If you sit them down and give them some Sauvignon Blanc from different regions of the world, they’ll quickly identify New Zealand as one that they like, because of the acidity. So that’s an area we focused on because that’s where the demand is.
Alex Jensen: The natural wine scene though, regardless of white versus red, or even grape variety, just generally speaking, there’s an interest that seems to be growing in natural wine. For those who are not exactly familiar with natural wine is maybe you can give us a quick lesson, but also talk to us about how that’s affecting your business and other wine importers here.
Simon Walsh: So usually, a wine will have a preservative to stabilize it so that it won’t fall to pieces in the bottle so it doesn’t break down further. And often they’ll add a yeast to initiate the fermentation. So, for natural wine, you often use that is naturally in the vineyard. And then limited amount of artificial so a pure natural wine has no artificial additives added to it. So, no preservatives, which can cause them to, in some people’s opinion taste off for a little funky sometimes. And they can be a little unstable. But for a lot of people, they say that when they drink them, they feel they’re more pure because there’s no preservative and they can feel bitter, more conscious health conscious people tend to focus towards the natural ones as well. Just on the Korean market. Yes, there’s been huge demand towards natural one. And we’re still trying to figure out whether that is going to be a continuing trend, or it’s going to be a bit of a bubble that we bring monitor one into the market and creams go back towards the more traditional styles at once. For us last year, we produced a Pet Nat bottle fermentation Sauvignon Blanc, and the demand has exceeded all expectations. We are forecasting around 500% growth and this year on what we imported last year. So, because of the bottle fermentation, we have to forecast because we have to put the wine inside the bottle for the feminine. And we can’t do that. Once the bottles or the wine has been put into stainless tank, so we have to forecast 12 months in advance of our sales. So, we also are looking at a Pet Nat made out of Pinot Noir. So, we’ll do a red bottle ferment this year as well, only because the demands here and we’re just applying what the customers want.
Alex Jensen: All of your wines are under the MOZZIE label if anyone’s listening now and they want to taste some of this M.O.Z.Z.I.E, but I’d like to ask you on a broader note as well, for anyone who’s interested in having products manufactured abroad or packaged abroad produced abroad and then bringing them into Korea. how challenging has it been for you to work with the various authorities along the way and the various people along the way to get this finished product into the Korean market.
Simon Walsh: So, in the beginning, it was sort of a trial and error. So luckily, we were very small and we bought small amounts. And we did fall over and did fail. The cost was limited. But I’ve seen lots of people come in with lots of money and tried to do it without experience or without using someone who was knowledgeable and lose lots of money. So, because I’ve done it for a number of years, I knew what I was doing with the MOZZIE label. It’s very challenging and that Korean Customs tend to change the way they do things a lot with the FDA is in place it’s been quite good. We’ve had a reduction in the tariffs that have come in people thought that the tariff removal with the FDA would be the silver bullet that would reduce the cost of wine and Korea but as many of you listeners probably know, the cost of wine in Korea is significantly higher than the local markets that produce them. So that I that saving was sort of passed on to the importer, the distributor, as well as the retailer. They’ve come down a little bit Things that have been troubling for us. Well, this year in particular, with a lot of trouble with shipping due to COVID. New Zealand’s been affected quite a lot with the shipping and supply chains. So, our shipments have been delayed, and we’ve been selling a lot of products. And it seems to be occurring not just with wine, but a lot of other products in the market is I spoken to retailers.
Alex Jensen: You mentioned pricing before. I think that’s interesting, because in the UK where I was very familiar, once upon a time with buying wine in people wouldn’t really be shocked by some of the prices of wines here in Korea. And it takes some adjustment for people who arrive in Korea from another market to get used to the pricing here. But for the most part, do you feel that the pricing is about right for the local market, and that there is a perception that you’re paying for higher value or higher quality product versus the kind of local spirits, so do tight market?
Simon Walsh: Well, sometimes you pay a lot of money for a bottle of wine, it’s not worth the money you’re paying for it. And vice versa, you can get a good bottle of wine, that’s a reasonable price. For example, I mean our wines, probably retail in Korea around 25 to 30,000 Won. Whereas in New Zealand that they would be under $20. So, there is a big difference to the local market New Zealand to Korea, but I think people we have to factor in a lot of the costs, there are costs and there’s relabeling. The cost is the shipping cost, obviously. And it’s actually still quite a significant amount of tax there. Even though the tariff was removed for a lot of countries like New Zealand, Australia, US and Europe. We’re still paying up to around 52% tax on the landed cost. So, you’re paying tax compounded tax on top of the landed cost. So, there is still significant amount of money we have to pay the it’s not like other markets where there was no tax. Do I see it as being overly expensive for the market? I still think it could come down a little bit. But that’s going to take the big players, the top 10 wine importers into Korea, they dominate the market, they own about 98% of the market share. If they bring their prices down, then everybody else has to come down with them. But if they don’t, then there’s no reason for other players to do as well.
Alex Jensen: Just one final question. We’ve seen a lot of talk about Korea in various industries, including the entertainment industry in recent months and years. How do you see your personal future here? Do you see still a lot of room to grow and move as a businessman in this country?
Simon Walsh: I see the Korean consumer has become very knowledgeable on what’s available in the market, whether that travel abroad, or they have got an increased disposable income. A lot of Koreans now shying away from having children but much later in life as you know from the birthrate which means they indulging in the luxuries of life and wine sort of fits in their category. And for me, my what my business is growing very, very well. Now we also import beer from New Zealand and still in sparkling water. So, we’re in that sort of premium category. And on a personal note, I miss New Zealand. The other day that you called in Korea was not that great and I looked at the equality New Zealand it’s very, very clean. So, I would like to keep my relationship with Korea I’ve come to love the country I call my second home. And hopefully I will continue to have a strong relation with the country, as well as getting back to my roots and continuing to establish the business relationship between New Zealand and Korea.
Alex Jensen: Well, 13 years in Korea not so unlucky for you, it seems, especially with signs of recovery and even a relatively decent COVID period for theory industry compared with some of the others. Simon Walsh, thank you very much for being with us. We’ll have to catch up with you again about beer in the future.
Simon Walsh: Cheers, Alex, next time with the meeting person so we can have a bottle of wine.
Alex Jensen: Well, I’m sure a few of us will be indulging of Chuseok all in moderation, of course. Speaking of which Koreabizcast we’ll take a break now until the start of October. The plan is to look back on pilot week and see what we can do to make this podcast really tick. If you’ve got any feedback, please get in touch and share it via email email@example.com. thanks again to the Four Seasons Hotel in Seoul for making this podcast possible. And to Rod Rothwell and Simon Walsh for coming on the show today. Until next time, all of us here at Koreabizcast and the KBLA wish you a very happy holiday.